http://jmk.sagepub.com/ Journal of Macromarketing http://jmk.sagepub.com/content/27/1/74 The online version of this article can be found at: DOI: 10.1177/0276146706296713 2007 27: 74 Journal of Macromarketing Yavuz Köse Empire Nestlé: A Brief History of the Marketing Strategies of the First Multinational Company in the Ottoman Published by: http://www.sagepublications.com On behalf of: Macromarketing Society can be found at: Journal of Macromarketing Additional services and information for http://jmk.sagepub.com/cgi/alerts Email Alerts: http://jmk.sagepub.com/subscriptions Subscriptions: http://www.sagepub.com/journalsReprints.nav Reprints: http://www.sagepub.com/journalsPermissions.nav Permissions: http://jmk.sagepub.com/content/27/1/74.refs.html Citations: at Oxford Brookes University on March 16, 2011 jmk.sagepub.com Downloaded from
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http://jmk.sagepub.com/Journal of Macromarketing
http://jmk.sagepub.com/content/27/1/74The online version of this article can be found at:
DOI: 10.1177/0276146706296713
2007 27: 74Journal of MacromarketingYavuz Köse
EmpireNestlé: A Brief History of the Marketing Strategies of the First Multinational Company in the Ottoman
Published by:
http://www.sagepublications.com
On behalf of:
Macromarketing Society
can be found at:Journal of MacromarketingAdditional services and information for
Among the few authors who have addressed these issuesis Rudolf Agstner (1999, 2004), who was probably the firstto pay attention to the activities of Western departmentstores in the Middle East, especially in Egypt. In her exten-sive study, Nancy Reynolds (2003) unfolds in detail the rela-tion between department stores and communities of urbancommerce in Cairo from the 1890s to the 1950s. AlthoughUri Kupferschmidt (2004) is concerned more with the socialhistory of the Singer sewing machine in the Middle East, healso provides us with preliminary information about themarketing of this consumer durable, perhaps the first mass-produced consumer good sold world wide (Davies 1976;Godley 2001). Relli Shechter, in his book “Smoking, Cultureand Economy in the Middle East” (2006), examines theemergence of modern markets in the Middle East, focusingon the Egyptian tobacco market and tobacco consumption.Finally—and probably the closest to the topic raised here—Michaela Kehrer (2005) is concerned with the marketingactivities of multinational companies distributing consumergoods in contemporary Egypt and the role local cultureplays in their marketing strategies.
This study adds to the literature in two ways: first, it aimsto give a historical survey of the activities of one specificmultinational company, and second, its geographical scope iscentered not on urban Egypt but on the capital of the OttomanEmpire—Constantinople, or Istanbul. Once inexpensive,mass-produced consumer goods started flooding the Ottomanmarket, the consequences of this change require some elabo-ration. What happened to these goods? How did productsshape and change local economic practices and local valuesystems? Or, to put it another way, how did foreign companiesact in a country with different cultural traditions, languages,and consumption behaviors?
It can be argued that private companies accelerated theintegration of the late Ottoman Empire with the capitalistworld economy. Western companies shaped not only theOttoman economy but also its social and cultural environ-ments. Modern marketing was one of the most importantinstruments in this process. This article investigates—via abrief historical survey of the marketing activities of Nestlé inthe Ottoman Empire between the years 1870 and 1921—theinteraction between Western firms and consumers. The arti-cle explores how Nestlé gained access to the urban Ottomanmarket and the methods it used for attracting the Ottomanconsumer. Nestlé’s sales efforts show that it had to adjust itsstrategies to local realities through a process of learning,adapting, and using the specific characteristics of its hostsociety to be successful.
During the past twenty-five years, a number of scholars(Eldem 1994; Issawi 1980; Kasaba 1988; Owen 1981; Pamuk1987; Quataert 1994) have made important contributions tothe economic history of the Ottoman Empire in the nineteenthcentury. The general consensus has been to assume that theOttoman economy was moving toward full integration withthe capitalist world economy, a process leading to “commer-cialization, urbanization, infrastructural innovation and theconsolidation of European financial control over the economicsources of the Empire” (Akarlé 2000, 109). Researchers haveassumed that inexpensive imported Western goods had a greatimpact on Ottoman economy and society, but the exact natureof this impact remains unclear. The main reason is that issuesof marketing, advertising, and the relations between compa-nies and their host societies were not given sufficient attentionand have therefore remained an obscure and neglected field inMiddle Eastern history. Thus, a whole array of questions con-cerning foreign companies, their goods, and the Ottoman con-sumer market were not considered until recently.
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Nestlé: A Brief History of the MarketingStrategies of the First Multinational Company
in the Ottoman Empire
Yavuz Köse
The author expresses deep gratitude to Ibrahim Muhawi, whose patience,suggestions, and professional support helped shape this article. Furthermore,the author would like to thank Albert Pfiffner, Gisela Procházka-Eisl, DenizVan Basselaere, and Aylin Besiryan for their invaluable information as wellas the editor and the anonymous reviewers for their helpful suggestions.
The very existence and availability of a Western good inthe Ottoman market did not necessarily mean it had to bebought. Other foreign items could be purchased, and localchoices also existed (Quataert 2000). Generally, the consumerhad to be convinced to buy, say, Nestlé’s breast-milk substi-tute Farine Lacteé instead of that of its competitor, Thistle, ora local alternative infant formula called “Memedeki çocuklaragida-i dakik” (instant food for infants) offered by DoctorZiya. Similarly, many shops and department stores, eitherlocal or of foreign origin, courted the consumer. And a quicklook at the advertising pages of the Ottoman press gives us thesense that selling products was hard work. This situation pre-vailed for many consumer-goods companies active in theOttoman realm.
Knowledge of the market realities of the host society aswell as the cultural dispositions of the target consumer wereessential for companies to bridge the gap between the new-ness and foreignness of themselves and the particular needs ofthe target consumer. On the other hand, the target consumerwas also faced with a need to “engage in a process of search-ing, learning and adapting to the products and services offeredby firms” (Lipartito 1995, 2). This process of reciprocal adap-tation will be examined herein via a case study of the Swisscompany Nestlé, which started operating in the OttomanEmpire in the early 1870s. Nestlé was the first multinationalcompany active there and still does business in Turkey today.
This article presents a brief historical survey of the mar-keting activities of Nestlé in the Ottoman Empire between theyears 1870 and 1921. It will explore the means used by Nestléto gain access to the Ottoman urban market and the methodsused to attract the Ottoman consumer. The purpose of thestudy is to reveal how modern marketing was put to use in theOttoman market by Nestlé and how the urban Ottoman soci-ety perceived the company, its products, and its marketingactivities. In examining the relation among modern marketingand the Ottoman society, the aim is to give some preliminaryanswers to some of the questions asked earlier. In line with thecurrent literature (Aktar 1998; Chalcraft 2004; Palairet 1997;Quataert 1993; Shechter 2006), it is suggested that the often-cited flooding of the Ottoman market with Western goods didnot lead to the total disappearance of local production. Therelationship between Western companies and local consumerswas more complex and more mutually negotiated. The exam-ple of Nestlé’s marketing activities from 1870 to the 1920sindicates that local consumers influenced foreign consumer-goods companies as much as the latter did the former, or asLipartito (1995, 2) puts it, they both “engage(d) in a processof searching, learning and adapting” to create the market-place.
DATA SOURCES AND PERIODIZATION
Primary source materials for this study were obtained fromthe Historical Archives Nestlé (hereafter AHN) in Vevey,
Switzerland. The AHN contains primary sources for all com-panies that, until 1970, came under the direction of Nestlé.For the Turkish market, AHN provides material ranging fromsales statistics and advertising expenditures to sample adver-tising ephemera beginning in 1870 to the company’s ownadvertising journal, which was first published in 1920. Thelatter document highlights Nestlé’s sales effort and the devel-opment of its marketing techniques in its different markets.Published here for the very first time, some of this material isa bit sketchy. Thus, Ottoman daily newspapers and journalscompose a second set of primary sources. These not only con-tain examples of Nestlé’s advertising and promotions, butthey give further evidence of how the Ottoman public reactedto and commented on foreign companies, their goods, andeven their marketing.
The study will proceed chronologically, starting with theyear 1870 until the year 1921. The various time spans usedhere—1870–1905, 1905–1912, 1912–1916, 1914–1918,and 1919–1921—reflect different stages of Nestlé’s activi-ties and crucial turning points for the company’s marketing(Hollander et al. 2005). These turning points are best describedas a set of internal and external causes that motivated changesin Nestlé’s policy toward the Ottoman market. The periodbetween Nestlé’s beginnings and its entering into the Ottomanmarket was short for two reasons. First, the relatively smallSwiss market forced Nestlé from the beginning to searchfor new opportunities (Schröter 1993, 1997). Second, theOttoman market was seen as potentially lucrative for theOttoman state; its urban society and its economy were allmodernizing and Westernizing in the late nineteenth century.Before examining Nestlé’s activities in detail, the followingsections offer a short introduction to the company’s history,followed by a description of the general situation of theOttoman Empire in the late nineteenth century.
NESTLÉ’S FIRST YEARS
Nestlé’s marketing strategies were first developed to sell anew product: infant formula. These strategies proved very suc-cessful from the beginning and contributed to the company’searly market leadership and global expansion. When Nestléwas founded 1867, it was one among many producers ofinfant formula, but within a few years, it became the marketleader (Orland 2004; Pfiffner 1993; Teuteberg and Bernhard1986). By 1875, the company was exporting to more thantwenty countries, including less advanced regions such asEgypt, Russia, the Ottoman Empire, and Indonesia/Malaya(Manderson 1982; Orland 2004; Pfiffner 1993). However, con-troversy surrounded this product category.
In the 1860s, a huge number of publications extolling themerits of breast-feeding became available in Europe, but atthe same time, critics associated infant mortality with theomission of breast-feeding (Orland 2004). While other factorscould be correlated with infant mortality, and breast-feeding
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was not the only possible—and available—way to feed babies,the “must-breast-feed” discourse became very strong amonghealth professionals, public-health authorities, and women’sorganizations (Beamer 1973; Orland 2004; Pfiffner 1993;Teuteberg and Bernhard 1986). Health professionals, in par-ticular, complained that the increasing amount of advertisingfor breast-milk substitutes hindered their efforts to promotenatural feeding. Therefore, companies found themselves inthe paradoxical situation of selling infant formula, which theytried to promote as a scientifically proven substitute for breastmilk, but without giving the impression that they were keep-ing mothers from breast-feeding. Nestlé and other producerswere thus forced to develop elaborate marketing tools to dealwith this contradictory situation.
THE OTTOMAN EMPIRE AND NESTLÉ
In contrast to the mostly Western market areas in whichNestlé invested in local production, the company saw theOttoman Empire in the beginning only as an export market.The goal of founder Henri Nestlé was to aim for great capitalsin all of Nestlé’s market areas, whether in Europe or in otherparts of the world (Pfiffner 1993). The greater urban centerswere ideal markets for Nestlé’s milk-based product, FarineLactée. Fresh milk was in short supply, wet nurses were prob-lematic, and breast-feeding was going more and more out offashion among the urban well-to-do. In the cities, working-class people increasingly suffered from a shortage of time andoften lived and worked in unhygienic conditions. Comparedto Europe, the Ottoman Empire in the nineteenth century wasrelatively less developed, but the Ottoman consumer first tar-geted by Nestlé could hardly be regarded as poor, and theOttoman capital Constantinople, today’s Istanbul, was anideal place to promote Farine Lactée.
Beginning in the 1830s, the Ottoman regime increasinglyfaced political, social, and financial challenges associatedwith encroaching modernization. Pressures on the Sultanfrom the European powers affected the military first, then thebureaucratic apparatus, and finally, the whole society. Whilethe Ottoman state coped with new ideas, a flood of mass-produced goods (favored by the trade agreements signed withEuropean states starting in 1838) transformed traditional pro-duction via guilds as well as consumption patterns in thelarger cities of the Empire. The urban population was grow-ing. The population of Constantinople, estimated at 870,000in 1885, reached one million in the 1900s (Duben and Behar1991; Karpat 1985). The capital had a cosmopolitan mix of European and Levantine residents and an ever-growingOttoman bureaucratic class with a relatively high level ofincome and an inclination toward European ways of liv-ing. These groups guaranteed a steadily increasing customerpool for foreign products, and beginning in the 1870s, becamethe target market for Nestlé in the Ottoman realm. There-fore, the rapid social and cultural changes that accompanied
the Westernization of urban society—“one of the majorforces of change at the time” (Duben and Behar 1991, 3;Esenbel 1994)—paved the way for Nestlé’s marketing efforts.
As in Europe, the Ottomans produced an abundant litera-ture on public-health conditions, personal hygiene, infantmortality, and the proper ways of feeding and rearing chil-dren (Anastassiadou-Dumont 2003; Duben and Behar 1991).Ottoman pediatricians shared the views of their Europeancounterparts, which is not surprising, for many of them weretrained in major European capitals such as Paris. For exam-ple, Besim Ömer [Akalin] ranked among the most influen-tial health professionals. He actively promoted health carefor children and their mothers (Isél Ülman 2003). In his writ-ings, Ömer emphasized the importance of mother’s milk forinfants up to six months and the need for supplementarynutrition after that period, which, in Ottoman times, con-sisted of mixtures of water or milk with rice, wheat, oats, orcorn flour (Besim Ömer 1896; Isél Ülman 2003). Besideshealth publications, one also finds a large number of refer-ences to breast-feeding in the Ottoman press, mostly as let-ters to the editor. It became evident that breast-feedingchildren for an extensive period of time (up to one year andmore) was a quite common practice, even among the well-to-do (Duben and Behar 1991).
Thus, the conditions that prevailed when Nestlé enteredthe Ottoman market posed a challenge for the company.True, the state apparatus and urban Ottomans were in a mod-ernizing mode, but cultural practices and attitudes aboutbreast-feeding remained more traditional. On the other hand,the attitudes of health professionals toward breast-feedingsubstitutes was not entirely negative. The issues and prob-lems surrounding breast-feeding were, in some respects, sim-ilar to those in Europe at the time. However, as we shall see,other influences on the family and the Ottoman consumeralso entered the picture. Nestlé’s marketing had to reconcileall of these factors.
NESTLÉ IN CONSTANTINOPLE: THE FIRSTTHIRTY-FIVE YEARS (1870–1905)
In 1874, Nestlé was acquired by Jules Monnerat, whorenamed the now limited-liability corporation Farine LactéeHenry Nestlé. The company’s approach to national and inter-national markets was maintained by the new management(Heer 1991; Pfiffner 1993). As was the case in Europe, agentshandled distribution in the Ottoman market. Pharmacies werecrucial for distribution everywhere because infant food wasseen not just as a substitute for mother’s milk or a supplementto breast-feeding but also as medicine for sick children, andsomewhat later, for the elderly, too (Pfiffner 1993). Sales datafor Farine Lactée from the years 1870 to 1904 show clearlythat E. Haenni (of Staeger & Haenni) was the sole agent in Constantinople (Sigerist 2004). Others, who were distribu-tors rather than agents, were also listed for the greater cities
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of the Ottoman Empire—such as Smyrna, Salonika, Cairo,and Alexandria—and are identified mostly as pharmacists(Tableaux des Ventes Farine Lactée: 1868–1875, 1875–1879).
The Constantinople agent was not only responsible forselling and distributing the product, mostly to local pharma-cies, but also for advertising it in diverse Ottoman daily news-papers and periodicals. The initial advertising expenses forOttoman cities are listed in the account book for the year1880. Nestlé advertised in Ottoman/Turkish publications suchas Vakit, Terdjuman-i Efkiar, in local European newspaperssuch as Levant Herald and Alexandrie Bulletin Financier,and in the local minority press, such as the Greek Neologos(Publicité 1880). Thus, potential consumers were not onlywell-off Turkish Ottomans but also Arabs, Armenians, Greeks,Jews, and Levantines. Advertising in different dailies andjournals was by no means the only activity in those years. Aswas the practice in Europe at the end of the nineteenth cen-tury, recommendations written by persons in the medical pro-fession, especially pediatricians who tested the product, werealso given press coverage (Pfiffner 1993; Nestlé CertificatsXVII 1898–1902).
Although press advertising remained the most impor-tant way to reach the Ottoman consumer, the 1890s saw anincrease in expenditures on samples, brochures, prospectuses,pictures, and enamel plates. By the early twentieth century,expenses for these were exceeding those of press advertising(Tableaux Comparatifs des Ventes 1897, 1899–1905 [here-after TCV]). This promotion mix was similar to that in coun-tries such as France, Germany, or Great Britain, but theamount spent (and sales volumes) were not nearly as high.Nevertheless, the Ottoman market was growing (TCV 1897,1899–1905).
The above data indicate that some promotions—for exam-ple, advertising on buses and trams—were still not used inTurkey at the end of the nineteenth century. On the otherhand, Nestlé used the traditional method of Ottoman guildartisans, who often presented their goods to the public bymarching through the streets on camels while playing music.A photograph dated 1900 depicts such an event to promote asecond Nestlé product, the condensed-milk brand Le Nid,which was launched to compete with the rival Anglo-SwissCondensed Milk Company, an enterprise founded in 1866(Heer 1991; van Orsouw, Stadlin, and Imboden 2005). Thepicture shows an assemblage marching through the streets ofthe capitol: two camels, each carrying two oversized milkcans, people holding panels that announce the advantages ofthe product in Ottoman-Turkish and in French, and a group of musicians (see Figure 1). Attracting attention this wayreached additional Ottoman consumers who may not havebeen literate. Interestingly, some years later, the Nestlé headoffice was built in the district where the picture was taken, theso called Karakeuy place, which was and still is a strategiclocation in Istanbul. Later on in the 1920s, Nestlé used this“camel-promotion” in its Latin American market (SociedadNestlé A.E.P.A. 1992).
NESTLÉ’S MERGER WITH ANGLO-SWISSCONDENSED MILK COMPANY (1905–1912)
The year 1905 was crucial for the Nestlé Corporation. It merged with its most successful competitor until then,the Anglo-Swiss Condensed Milk Company, and became theNestlé and Anglo-Swiss Condensed Milk Company (here-after NASCM). Together, the new company was capitalizedat more than forty billion Swiss francs and had eighteen facto-ries located in Switzerland, Great Britain, Norway, Germany,Spain, and the United States (Heer 1991). This fusion also had far-reaching consequences for Turkey. The new enter-prise had four directors—two in Vevey, and one each inCham, Switzerland, and London. The London headquartersbecame most important for organizing exports to the MiddleEast market, which included Egypt, Syria, Palestine, andMesopotamia as well as Turkey, the Balkans, and Greece. Aslate as 1910, London played a major role in the Ottoman mar-ket (see below).
The new management of NASCM decided to reorganizesales and distribution by replacing most of its sales agents,including in Constantinople, with local subsidiaries (Heer1991). The contract with the Swiss E. Haenni—who had beenthe sole agent in Constantinople between 1878 and 1905—wascanceled because of decreasing sales levels (Pfiffner 1993).The AHN does not provide specific information as to Haenni’sreplacement, but we learn from contemporary advertisementsin Ottoman journals that a certain George Baker & Sonbecame Nestlé’s new warehouse distributor. Besides FarineLactée and condensed milk, George Baker & Son introducednew and more extended product lines to the market, such ascacao, chocolate, and sweetened and sugarless condensedmilk. Under the direction of the London headquarters, withGeorge Baker & Son as the new local distributor, product
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FIGURE 1 PROMOTION OF NESTLÉ’S CONDENSED MILK“LE NID,” 1900
SOURCE: Photo courtesy of Nestlé Turkey.
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lines, marketing, and advertising for the whole Middle Eastwere revitalized. From 1906 onward, advertising activityincreased markedly. More and more visuals supplementedadvertising copy. The calligraphic elements of the Ottoman
script were deployed to create one of the most interestingexamples of what we might call “ethnic” advertising. This typeof advertising used the traditional levha1 practice to promoteNestlé products without the brand’s bird nest, which was theprimary advertising symbol in the European market (seeFigure 2). In addition, outdoor advertising became more andmore important during this period for attracting attention toNestlé products.
CONSTANTINOPLE BECOMES THE HEAD OFFICEFOR THE MIDDLE EAST (1912–1916)
As a consequence of Nestlé’s increasing activities inTurkey, particularly in Constantinople, the company decidedin 1912 to move its department for the Middle East marketfrom London to Constantinople (as we shall see a significantmove in terms of World War I). Edouard Muller, who since1910 had been especially concerned with the Middle Eastmarket, accompanied the move. This had far-reaching con-sequences for Nestlé as a company. Not only did the newarrangement help to build up Nestlé’s activities in Turkey,but it was also a key factor in its future growth as a company,for Muller was later to become the head of Nestlé Paris andwould reorganize worldwide distribution (see below) beforebecoming CEO in 1937—a position that he held until 1948.Between 1912 and 1913, Nestlé had its own head office anddepot erected in Constantinople, near the above-mentionedKarakeuy place (see Figure 3). This building, which stillexists today, was most likely a commissioned work designedby the famous Turkish architect M. Vedad Tek (Batur 2003).
From this office, Nestlé began a marketing offensive start-ing in 1913. One of the most remarkable actions was pub-lishing a twenty-six–page advertising supplement in one ofthe most famous Ottoman journals of that time, Servet-iFünun (February 1913; see Figure 4). Almost certainly, thisis the first example of a corporate advertising supplement inthe Ottoman press. This illustrated supplement gave Ottomanreaders detailed information about Nestlé, including its ori-gins, factories, production processes, new office and staff,and of course, product-preparation directions and recipes. Atthe same time, Nestlé started promotional contests, whichwere advertised in local newspapers and went on for longperiods of time. Although the firm had first used outdooradvertising and billboards in 1905–1906, it now started illu-minated advertising in the European district Beyoglu, alsoknown as Pera. Nestlé vaunted this new technology as thegreatest illuminated outdoor advertising of the city (seeFigure 5). The Ottomans did not appear to have clear regula-tions concerning outdoor advertising. However, under SultanAbdülhamid II (1875–1909), directives stipulated that adver-tising with posters and placards (affiche) was only allowedwith authorization from the municipality. Generally speak-ing, commercial outdoor advertisements seem to have beenallowed as long as they did not offend against religious law
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FIGURE 2 “NESTLÉ MILK CHOCOLATE IS THE BEST!”ADVERTISEMENT IN THE PERIODICAL SHEHBAL,1909
FIGURE 3 NESTLÉ’S ISTANBUL OFFICE, NESTLÉ SUPPLE-MENT, SERVET-I FÜNUN, 1913
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or the person of the Sultan (Young 1905).By the early 1900s, Nestlé had already realized that it
was important to “address oneself to the attention of themasses, to attract and to arrest their attention” (“La PublicitéHumoristique” 1921, 21; all translations by author). Thecompany took measures to do so. It placed billboards, dis-tributed outdoor enamel plates for stores (see Figure 6), cre-ated window displays in the sales department (“La PublicitéHumoristique” 1921), maintained close contact with Ottomanhealth professionals, and was present at exhibitions organ-ized by the Red Crescent and the Greek Red Cross (“LaPublicité Humoristique” 1921).
The activities of the new head office in Constantinopleshow evidence of more market-oriented research and use ofthese insights for new marketing concepts and techniques.In this respect, the use of contests was decisive. For exam-ple, the company launched a contest in the Ottoman dailyTanin in early 1914 in which customers had to bring twelveNestlé condensed-milk labels to the head office to take part
in a lottery and have a chance to win one of the prizes(“Nestlé Südü Etiketlerinin Büyük Müsabakasé” 1914). It isnot a mere coincidence that the condensed-milk campaignsstarted about the year 1913, just after the municipality hadforbidden for hygienic reasons the selling of milk in copperbowls on the street (Kologlu 1999). The Ottoman govern-ment was making an increasing effort to bring hygiene lev-els to European standards (Moulin 1992; Özgür 1999; IsélÜlman 2003), and Nestlé, quite aware of these regulations,used them to gain an advantage over local competitors. Inthe local German daily Osmanischer Llyod, Nestlé adver-tised the public health authority’s confirmation that its con-densed milk was clean while some of its competitors’ milkwas not (“Announcement” 1914). This advertisement alsoannounced that competitors were trying to copy not onlyNestlé’s products but also its name and that a company
named Thistle was only a bad imitation. The year before,Nestlé had made it known in the daily Le Moniteur Orientalthat it was willing to start proceedings against some mer-chants who would label their products with brand namesthat were “analogue à celle de Nestlé” (“La Cie NestléIntente un Procès” 1913, 3).
When the Ottomans finally entered the war in November1914, Nestlé was prepared to reconsider the new situation. Ina meeting of the board of directors, it was decided to changethe name Nestlé & Anglo-Swiss Condensed Milk Co. AgenceGénérale du Levant Constantinople to Compagnie NestléConstantinople. Although the reasons for this change are notmentioned, it is not hard to imagine why the managementdropped the word Anglo from its name (Minutes of the Board1915).
NESTLÉ DURING THE WAR (1914–1918)
Why did the activities of Nestlé increase so rapidly follow-ing the opening of the Constantinople office? Although salesdata for Turkey and the Middle East do not exist for the years
between 1906 and 1914, we do know that in the 1900–1905period, Nestlé sold, on average, ten thousand to twenty thou-sand tins, whereas in 1915, its sales had increased tenfold(TCV 1897–1906; Nestlé Sales Statistics 1899–1916). Thewar was the main factor in Nestlé’s growth. Despite milkshortages, disruptions, and the difficulty of acquiring and dis-tributing material, “the war created tremendous new demandfor dairy products, largely in the form of government con-tracts. To keep up, Nestlé purchased several existing factoriesin the United States. By war’s end, the Company had 40 fac-tories, and its world production had more than doubled since1914” (“History 1905–1918”; Heer 1991).
Although the Great War became a major impetus forNestlé’s increased production and activity, rapid growth trendsfor the Ottoman market most likely were established earlier.The years between 1908 and 1914 were a troublesome timein the history of the Ottoman Empire.
With the revolution of 1908, the Young Turks (Kansu1996) put into effect the constitution of 1876, in which manyOttomans had put great hopes. But their hopes for freedom,stability, and prosperity after thirty years of the continueddespotism (istibdad) of Sultan Abdülhamid II (Georgeon2003) were not fulfilled, nor could the new government gainsubstantial advantages in the international arena. One disasterfollowed another: a war with Italy between 1911 and 1912,the Balkans War between 1912 and 1913, and finally, theentry into World War I. Nestlé controlled the Middle East andBalkan areas in situ, and from 1912–1913 onward, the Con-stantinople office put the Balkans, Greece, Syria, Palestine,Mesopotamia, and Turkey under its direct control. The BalkanWars involved heavy losses for the Ottomans (Dumont andGeorgeon 1989; Macfie 1998). Though no direct evidenceshows that Nestlé had a contract with the Ottoman govern-ment during these wars, it did supply the Ottoman army withfood, and in appreciation, Sultan Mehmed V awarded Nestléa certificate and a silver industry medal in 1913. This award,styled like the classic imperial edict (ferman-i hümayun) withthe calligraphic tughra (a seal formed from the name of thesovereign and his father) of the sultan, increased Nestlé’sprestige locally (see Figure 7). Two years later, this very cer-tificate was used by Nestlé in the Latin American market asproof of its geographic expansion and success (Almanaque dela Harina Lacteada Nestlé 1915). Even today, it is used byNestlé Turkey on its Internet sites.
REORGANIZING NESTLÉ AND ITS INFLUENCEON MARKETING (1919–1921)
The postwar period confronted Nestlé with a severe cri-sis that became apparent as “[G]government contracts driedup following the cessation of hostilities, and civilian con-sumers who had grown accustomed to condensed and pow-dered milk during the war switched back to fresh milk whenit became available again” (“History 1918–1938”). To face
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FIGURE 6 NESTLÉ ENAMEL PLATESOURCE: Courtesy of Nestlé Turkey.
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these problems, Nestlé, in 1919, reorganized its distributionsystem under the direction of the newly founded head officein Paris—Administration des Maisons de Vente Continentales.Edouard Muller, formerly responsible for the MiddleEastern market, became the new “directeur pour le conti-nent,” with the coordination of finance and marketing underhis control. Distribution was subdivided into a network of offices, called Maisons de Vente Continentales (here-after MVC), located in the capitals of Belgium, Denmark,Spain, Netherlands, Scandinavia, Russia, and of course, theMiddle East: Turkey, Bulgaria, Greece, Yugoslavia, Syria,Palestine, and Egypt (Nestlé & Anglo-Swiss CondensedMilk Company 1919). In the Ottoman market, Nestléexpanded its network beyond capital cities, adding localagents in remote areas such as Samsun or Trabzon in theBlack Sea region.
Marketing, or as described in the administration reportfor the new management, publicité (“this domain which
is so important and so wide”) now received greater emphasis(Nestlé & Anglo-Swiss Condensed Milk Company 1919, 11).The report states that the sales control unit (contrôles desventes) should gather together in one place all the differentadvertising practices used by the MVCs, not only for controlpurposes but to facilitate the classification of the ideas, sug-gestions, and activities of all the directors of the MVCs. Thisconcentration of marketing efforts in Paris would allow Nestléto profit in one region from the success of marketing tech-niques used in other, comparable regions: “if necessary thesemethods will be modified or perfected in order to adapt themto the other markets” (Nestlé & Anglo-Swiss Condensed MilkCompany 1919, 11).
One way of rationalizing this effort was the company’smonthly publication Bulletin Mensuel de Pulicité (BMdP),which would enable the directeurs of the different MVCs toexchange their ideas about advertising, share the results oftheir experiences, and give practical advice to each other.The first issue was published in April 1920, and later issueswere sent out on a regular basis. Articles included in BMdPprovide evidence of Nestlé’s awareness of the differencesbetween markets, especially between the “Occident” and the“Orient.” Whereas, for example, it was relatively easy to getinformation about families with newborn children throughthe Service de Natalité (registry offices) in Europe, thesedata were much harder to obtain in the Ottoman Empire. In addition to the deficit of information available in theOrient, Nestlé had to overcome problems of cooperationfrom local administrations, which was easier to achieve inthe Western countries. Even if the right information couldbe found, this did not necessarily mean that the desired tar-get audience—mothers—could be reached. “The orientalwoman, the wife, lives in the secrecy of her apartments, farfrom the world, more or less hidden, inadorable (inaccessi-ble?)” (“La Publicité Humoristique” 1921, 20). It was advisednot to give up one’s aim (activité) and to search for places“where one can be free, where one can act out, evolve suc-cessfully: we want to say outside, in the street” (“La PublicitéHumoristique” 1921, 20).
This attitude reminds us of Weber and Sombart’s thoughtson the capitalist entrepreneur, who is “impatient of older,cumbersome methods of distribution” and who further is“unwilling to tolerate low levels of demand, no matter howstrongly sanctioned by religious, social, or political customthose levels were” (Weber cited in Fullerton 1988, 77).
He [the entrepreneur] will try to push over, under, around, orthrough restraints established by public policy, e.g., sumptu-ary legislation. He will seek to discover and meet existingdemand, to stimulate latent demand, and even to encouragenew demand—because not to do so would be to risk the lifeof his business enterprise. (Fullerton 1988, 77)
As a record of an ongoing discussion about marketingpractices in different regions, BMdP gives us interesting
insights into how Nestlé quickly realized from direct experi-ence that despite stereotypes, Orientals were not all the same.Based on reports from the MVCs, Nestlé recognized that justas European markets differed from one to another, there wasby no means a homogenous market called the Orient, and thecompany could not act in Syria as it did in Turkey or inEgypt. In an article about publicité in Syria, the author pointsout that successful advertising will consider the mentality of the target clientele (mentalité de la clientele à conquerir).Whereas the Syrians seemed backward, the Turks and Egyp-tians were seen as being more Westernized, and therefore,more receptive to modern advertising. To appeal to the Syrianconsumer, advertising had to remain simple (“La PublicitéHumoristique” 1921, 13, 93). Thus, while on one hand, therewere assumptions about mentalité, on the other, the differentcircumstances (the hardly accessible home, widespread illit-eracy, local customs, markets, and even recipes) played anequally significant role in creating new marketing ideas forNestlé products.
GETTING CONNECTED WITH THE OTTOMANS—NESTLÉ BECOMES TURKISH
As far as Turkey was concerned, the significance of MVCactivity as discussed in various issues of BMdP was how to indigenize Nestlé. As head of the Constantinople MVC,Edouard Muller played a major role in this process. Theimportance given to sales promotional efforts for Nestlé prod-ucts in Turkey under his management is demonstrated by thefact that more than one employee was designated for this duty.In 1913, H. Bérar was made Chef du Département de laPublicité, and N. Fouad Bey held the position of Attaché au Service de la Publicité (“Nestle Fabrikasé KainaténSüdcüsüdür” 1913). The employment in this department of anOttoman Muslim points to Nestlé’s awareness of the impor-tance of local knowledge, the “ethnic factor.”2 Several adver-tisements clearly show how local customs and traditions wereused to promote the foreign Nestlé products in host context.Nestlé condensed milk was often presented as a possible ingre-dient in traditional Turkish dishes such as mohallebi (creamdish). Advertising cartoons featured Ottoman character typessuch as Mirza Bey to help the Ottoman consumer identify withNestlé. Humorous stories, in which Nestlé always played acentral role, told about the everyday life of these figures andtheir families. One series of ads followed Mirza Bey duringone week of his life. Mirza Bey is first depicted as a feeble per-son who has stomach problems. Even his servant and cat seemto be in a bad way. To revive him, each day, his servant pre-pares a mostly traditional dish with Nestlé milk, the recipesfor which are positioned above the cartoons.3 After a week,Mirza Bey, his servant, and even his cat all look well fed(“La Publicité Humoristique” 1921, 24–25). Another cartoondepicts a corpulent man, who sits and smokes a water pipe,telling the person standing opposite that his condition is get-
ting better every day since he drinks Nestlé milk. Nestlé milkhas made him so satisfied that he even gave his water pipe thename Nestlé. Some cartoons also carried the message that thetraditional way of buying milk products from street vendorswas backward, and above all, unhygienic (see Figure 8).
Nestlé not only tried to attract the Ottoman consumers’attention to sell its products, it also aimed at becoming an inte-gral part of Turkish society. By 1914, Nestlé was boastingabout its more than forty-year presence in the Ottoman Empire(Kologlu 1999), demonstrating that even company history wasmarketable. Nestlé’s profile was such that it became a majortarget of the hostile reaction to foreign companies that accom-panied rising Turkish nationalism after 1908. Some letters tothe editor in Ottoman dailies and journals are revealing in thisrespect. Long-standing and well-known foreign companiesserved as scapegoats for the worsening conditions of Ottomansociety. Like some department stores (Çetinkaya 2002), Nestlé
FIGURE 8 THE MAN WHO NAMED HIS PIPE NESTLÉ AND AMAN WHO REFUSES TO BUY MILK FROM THESTREET VENDOR, NESTLÉ SUPPLEMENT, SERVET-IFÜNUN, 1913
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was thought to be serving hegemonic European interests.Paradoxically, Nestlé was at the same time considered by somean exemplary company with enviable products and advertisingmethods. After giving detailed information about a Nestlé con-test in the Ottoman press, one female letter writer complained:
This company, which narcotizes our palates with sweet,sweet words, which squeezes money out of our pockets . . .My god, what creatures we are! As I said before, we are a use-less nation. We give all that money—yes, stacks of money—from our pockets to this company. Is there not one patriot whocould establish a company, if not like Nestlé than at least asmaller one? (“Niyazi ve Sürekasé” 1913, 2)
She finished with an expression of resignation, statingthat even if there existed Ottoman establishments, “we areabsolutely determined to put our money in the pockets of theWesterner. That’s just like us!” (“Niyazi ve Sürekasi” 1913, 2).Shortly after the fall of the Ottoman Empire and the estab-lishment of the Republic of Turkey, the desire of this dissatis-fied Ottoman consumer could be satisfied. With the beginning
of Republican rule, an active and ever-growing indigenousindustry regularly presented its products at local fairs (yerlimalé sanayi sergileri). At this time, Nestlé opened its firstchocolate factory in Istanbul, exhibiting its goods in localfairs next to those of Turkish companies (“Direction Généraledu Commerce” 1927; see Figure 9).
CONCLUSION
Nestlé’s breast-milk substitutes, whose marketing againbecame controversial in the 1970s, were being actively mar-keted in less developed countries a full century earlier (Schwarz2000). The controversy surrounding breast-milk substitutesthen centered not on the activities of multinationals in lessdeveloped countries, as it does today, but focused on the issueof the high infant mortality in Europe, for which breast-milk substitutes were seen as one of the major causes. In itsEuropean markets, Nestlé had not to worry about being amultinational corporation but rather about the development ofclever marketing strategies to counter criticism of breast-milksubstitutes.
Nestlé’s concerns in the Ottoman Empire, on the otherhand, were not focused on spinning debates about infant mor-tality but on reaching consumers who, as in Europe, weremodernizing yet whose cultural background was sufficientlydifferent as to require new and local forms of advertising.Nestlé first targeted the literate and better-off segment of urbanOttoman society, including ethnic minorities. Subsequently,the widespread use of billboards and other mass-media pro-motion techniques assured public awareness of Nestlé’s prod-ucts among all segments of Ottoman/Turkish society.
Although Nestlé addressed mainly the civilian Ottomanconsumer, political circumstances favored a second consumergroup: the Ottoman army. With the outbreak of the BalkanWars (1911–1912), Nestlé intensified its relationship with theOttoman government. Because of the shortage of fresh milk,Nestlé’s condensed milk and milk powder were to become,like weapons and railroads, a necessity for the Ottoman army.
Yet, Nestlé’s main target in the long term was not the mil-itary but the civilian Ottoman consumer. In the ever-denseratmosphere of Turkish nationalism after 1908, which gaverise to growing hostility to foreign companies, Nestlé real-ized the importance of being perceived as a local company bythe Ottoman Turks. Although facing demands for boycottagainst its products, Nestlé made every endeavour to embarkon its localization strategy by constantly observing the mar-ket and its conditions and seeking out and implementing newpromotional tools for its products. Nestlé understood theimportance of embedding the company, its brand name, andits products within the culture and consumption patterns ofthe Ottoman Empire. In its efforts to rationalize all aspects ofadvertising, the company realized that different markets andmentalités required different approaches. It could be arguedthat above all, the extensive use of and search for appropriate
JOURNAL OF MACROMARKETING 83
FIGURE 9 “CONSUME LOCAL GOODS!” (“YERLI MALI KUL-LAN!”)—NESTLÉ EXHIBITING IN A LOCAL FAIRFOR TURKISH COMPANIES IN THE 1930S
SOURCE: Courtesy of Historical Archives Nestlé, Vevey.
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marketing and advertising tools was one of the essential keysfor Nestlé’s continual success in the late Ottoman Empireand in the newly founded Turkish Republic.
NOTES
1. Levha is a “large-scale calligraphic composition, most commonly inthe celî sülüs and celî ta’lik scripts, that can be framed and hung in mosques,offices, and homes” (Derman 1998, 190).
2. The later director (manager) of the Istanbul office, Nissim Fahri, wasan Ottoman Jew who began his career in 1913 shortly after the opening of theConstantinople MVC. It was Edouard Muller who hired Fahri. From his firstposition as an assistant accountant, Fahri worked his way up to chief account-ant and finally became the executive director of the Istanbul branch (AHN).
3. About 1912, Procter and Gamble also advertised its product, Crisco,with regular recipe changes (Strasser 1989).
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